Coca-Cola stock dipped after executives gave its investors an (apparently) unconvincing spiel about the company’s success on a Tuesday morning (Feb. 13).
Shares of the Atlanta-based beverage company rose to $60.55 before the bell, when it reported revenues that beat expectations — but then they slid back down to $58.95.
Coca-Cola’s hot topics
Sprinkled throughout executives’ talk of new products, packaging and strong demand was a trigger word: inflation. In fact, inflation was noted about once every two minutes, with a total of nearly 40 mentions between executives and analysts. That’s nearly eight times the rate it was mentioned by its historic rival PepsiCo in its own call with investors last week (Feb. 9).
Another topic that investors have been wary of was also highlighted by Coca-Cola’s leaders: war in the Middle East. Like other companies, Coke executives were sure to tread lightly, indicating that the Israel-Hamas war hurt sales without actually saying the words “Israel,” “Hamas,” “Gaza,” “Palestine,” or “war.”
By the numbers
👀 36: Number of times inflation was mentioned by executives 36 times in the 67 minute call
💬 5: Number of times PepsiCo mentioned inflation on its call with investors
💰 $10.8 billion: Coke’s revenue for the fourth quarter. which beat the expectations of Wall Street analysts polled by FactSet
📈 7%: How much worldwide sales grew for Coca-Cola in the fourth quarter
🏃🏽♂️ $24 billion: How much higher Coke’s market cap is compared to PepsiCo
What Coke execs said about inflation
Hyper-inflationary markets, in Argentina and other Latin American countries, for example, took a toll on Coca-Cola’s sales.
“During the quarter, inflation intensified and exceeded 60% across these markets. In aggregate, while they represent less than 5% of our total volume, this degree of inflation creates a cosmetic distortion to our underlying results,” said John Murphy, the company’s chief financial officer.
“We anticipate hyperinflationary pricing will continue to play a role in 2024, but will moderate throughout the year.”
Meanwhile, inflation put a strain on consumers’ spending habits in the US, executives said. But they noted that their ability to grow revenue despite inflation should be a positive sign, not a negative one, especially as the economy nears a “soft landing.”
“Our revenue growth management execution capabilities continue to be distinct advantages as demonstrated by our ability to deliver volume and transaction growth despite ongoing inflationary pressures,” said CEO James Quincey.